The Government Accountability Office says the Pentagon has a credible plan in place for getting its books in shape for an audit by fiscal 2017. But planning for an audit and actually passing one are two very different things, GAO said in reports and testimony to Congress last week.

GAO found leaders in the Pentagon comptroller’s office have shown leadership on the issue, and have generally done a good job of laying out a plan for financial improvement and audit readiness.

But Asif Khan, GAO’s director for financial management and assurance, said there are big question marks about the military services’ ability to carry out that plan.

“The picture changes when we begin to look at the components,” Khan said in testimony Thursday before the Senate Homeland Security and Governmental Affairs subcommittee on federal financial management. “The plan has to be executed by the services properly, and the results are very mixed so far. The systems have to be implemented and be in place well before 2017, and just looking at the timeline, it’s worrying. Their completion timeline is very close to 2017.”

Congress established the latest deadline for DoD to get to audit readiness in the 2010 Defense authorization bill, though Defense Secretary Leon Panetta has said he wants the department to get there sooner.

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GAO examined a selection of audit readiness efforts across the military services for a series of reports the audit agency issued last week. Among its findings:

The Navy and Air Force had not done enough to develop upon and implement the Pentagon’s financial improvement guidance. Consequently, the two services asserted that they were ready for audits prematurely.

GAO found major issues with the huge enterprise resource planning systems being put in place by the Army and Air Force. The ERPs are critical to integrating financial information from across the services.

Auditors for the Marine Corps, which is serving as DoD’s test bed for the first large scale audit in a military branch, had to issue a disclaimer of opinion because the Marines could not provide proper supporting documents for their accounting transactions.

Robert Hale, DoD’s chief financial officer and comptroller, said the Pentagon knows full well that just planning for 2017 isn’t enough, even if the deadline still is six years away. He said DoD simply doesn’t know what it has to do in order to meet audit standards, since it’s never tried before.

The only way to find out, he said, is to dive in and start sending professional auditors after individual pieces of DoD’s scattered financial systems.

“I think this a good way to go,” he said. “I believe in plans, and we can probably do better with the plans, but we are learning so much [through professional audits]. They’re really auditors, and they know financial audits. We don’t, frankly, at the Department of Defense. They’ve helped us immensely, because they can say, ‘you’re not going to make it here, but if you did A, B, and C, you’d be okay.'”

DoD has created a blanket purchase agreement for outside auditing services. Hale said DoD prequalified six major audit firms under the program. The BPA lets the department dispatch professional auditors into DoD programs whenever it feels those programs are ready to be put to the audit test.

The department’s financial management leaders say they’re also learning a lot simply by trying to implement new tools, such as the large enterprise resource planning systems, even when they turn out not to work the way they were intended.

“The fact that these systems have interfaces that don’t always work is often a feature, not a bug,” said Jamie Morin, the Air Force’s comptroller. “It reflects data from feeder systems that’s not reliable. The interface into the ERP is not working well because the data’s not good. The implementation of these more rigorous systems brings to light the process problems and the systems problems around the rest of the enterprise. That’s why we’ve got to just turn these systems on and try them, rather than trying to build the perfect plan and only then confront it with the real world.”

DoD still is hoping to make the Marine Corps its test case for a large audit in a military service. Although the first attempt last year resulted in a disclaimer of opinion, the service again is attempting to prepare for an audit of one piece of its finance picture: the Marines’ statement of budgetary resources.

Gladys Commons, the Department of the Navy’s comptroller, said they learned a lot about what’s required for a successful audit from the Marines’ first go-round.

“We’ve learned we need an entire audit infrastructure. We need to have a methodology for passing information to the auditors, and it’s a large volume of information,” she said. “We also learned from the Marine Corps that we need to get everybody involved — leadership, business process owners, our service providers. This is not just a financial management problem. We need to look at our business processes end to end. We’ve incorporated those lessons in our plans.”

Hale said the department also has had some success amid its audit failures. Several DoD components are audit ready, including the Defense Finance Accounting Service, the Army Corps of Engineers, the Defense Contract Audit Agency and several large DoD trust funds. That’s all well and good, said Sen. Tom Coburn (R-Okla.), but getting the rest of the department on track is a matter of urgency.

“We’re in a whole new set of realities in our country,” Coburn told DoD financial management leaders at Thursday’s hearing. “There’s no questioning of your motives, and it’s a big problem. The question is how we get it solved quickly. We don’t have the luxury anymore of letting this continue given our fiscal situation. ”

Hale said the department is concerned about getting to audit readiness too: the issue is among the Pentagon’s top 10 priorities, and he said he remains optimistic about the 2017 goal. But he said it’s also important not to overstate the problem. He said the department does know where its funds are going, and those funds are going where they’re needed. “There are problems, and auditable financial statements would help,” he said. “But when I ask senior commanders, they almost always tell me that they’re getting the financial support they need.”

And, Hale added, the tumultuous political process around the federal budget over the past year hasn’t exactly helped matters.

“These are things I have not seen in more than 30 years of working in and around Defense financial management,” he said. “A six-month continuing resolution, which just drained support that we needed to do other things, planning for a government shutdown, which consumed an enormous amount of attention-fortunately we didn’t have to implement it, planning to run out of cash during the debt ceiling debate. And now innumerable what-ifs around sequesters.”